SEGMENT DATA AND RELATED INFORMATION

Operating Segments

Operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Company's "Principal Executive Officer") in deciding how to allocate resources and in assessing the Company's performance. As a result of the similarities in the procurement, manufacturing and distribution processes for the Company’s products, much of the information provided in the Unaudited Consolidated Financial Statements and provided in the segment table below is similar to, or the same as, that reviewed on a regular basis by the Company's Principal Executive Officer. As noted in Note 1, "Description of Business and Summary of Significant Accounting Policies," effective January 1, 2018, the Company operates in four new brand-centric reporting segments, in line with its new organizational structure that is operated based on four global brand teams. As a result, segment financial data for the first quarter of 2017 has been recast from what was presented in previous filings and presented under the new organizational structure.

At March 31, 2018, the Company’s operations are organized into the following reportable segments:

•

Revlon - The Revlon segment is comprised of the Company's flagship Revlon brands. Revlon segment products are primarily marketed, distributed and sold in the mass retail channel, large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, professional hair and nail salons, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the U.S. and internationally under brands such as Revlon in color cosmetics; Revlon ColorSilk and Revlon Professional in hair color; Revlon in beauty tools; and Revlon in nail color.

•

Elizabeth Arden - The Elizabeth Arden segment is comprised of the Company's Elizabeth Arden branded products. The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics primarily to prestige retailers, department and specialty stores, perfumeries, boutiques, e-commerce sites, the mass retail channel, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business, in the U.S. and internationally, under brands such as Elizabeth Arden Ceramide, Prevage, Eight Hour, SUPERSTART, Visible Difference and Skin Illuminating in the Elizabeth Arden skin care brands; and Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue and Elizabeth Arden Green Tea in Elizabeth Arden fragrances.

•

Portfolio - The Company’s Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors in the U.S. and internationally and large volume retailers, specialty and department stores under brands such as Almay and SinfulColors in color cosmetics; CND in nail polishes and nail enhancements, including CND Shellac and CND Vinylux nail polishes; Cutex nail care products; Pure Ice in nail polishes; American Crew in men’s grooming products; and Mitchum in anti-perspirant deodorants. The Portfolio segment also includes a multi-cultural hair care line consisting of Creme of Nature hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S.; and a body care line under the Natural Honey brand and hair color line under the Llongueras brand (licensed from a third party) that are both sold in the mass retail channel, large volume retailers and other retailers, primarily in Spain.

•

Fragrances - The Fragrances segment includes the development, marketing and distribution of certain owned and licensed fragrances as well as the distribution of prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers, specialty stores, e-commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as Juicy Couture, John Varvatos, All Saints, La Perla, Wildfox, Charlie, Curve, Elizabeth Taylor, Britney Spears, Christina Aguilera, Shawn Mendes, Halston, Ed Hardy, Geoffrey Beene, Alfred Sung, Giorgio Beverly Hills, Lucky Brand, Paul Sebastian, White Shoulders and Jennifer Aniston.

The Company's management evaluates segment profit for each of the Company's reportable segments. Effective January 1, 2018, the Company allocates corporate expenses to each reportable segment to arrive at segment profit as these expenses are now included in the internal measure of segment operating performance. The Company defines segment profit as income from continuing operations before interest, taxes, depreciation, amortization, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses. Segment profit also excludes the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance, which includes the impacts of: (i) restructuring and related charges; (ii) acquisition and integration costs; (iii) deferred compensation costs; (iv) costs of sales resulting from a fair value adjustment to inventory acquired in the Elizabeth Arden Acquisition; and (v) charges related to the Elizabeth Arden 2016 Business Transformation Program. Such items are shown below in the table reconciling segment profit to consolidated income from continuing operations before income taxes. The Company does not have any material inter-segment sales.

The accounting policies for each of the reportable segments are the same as those described in Note 1, "Description of Business and Summary of Significant Accounting Policies." The Company's assets and liabilities are managed centrally and are reported internally in the same manner as the Unaudited Consolidated Financial Statements; thus, no additional information regarding assets and liabilities of the Company’s reportable segments is produced for the Company's Principal Executive Officer or included in these Unaudited Consolidated Financial Statements.

The following table is a comparative summary of the Company’s net sales and segment profit by reportable segment for the periods presented. Prior period amounts have been restated to reflect the current period's presentation:



	Three months ended March 31,
	2018			2017
Segment Net Sales:
Revlon	$	229.1		$	243.8
Elizabeth Arden	105.7			95.7
Portfolio	134.5			146.6
Fragrances	91.4			108.8
Total	$	560.7		$	594.9

Segment Profit:
Revlon	$	2.3		$	21.8
Elizabeth Arden	1.5			(0.4		)
Portfolio	(2.8		)	1.5
Fragrances	3.2			8.7
Total	$	4.2		$	31.6

Reconciliation:
Total Segment Profit	$	4.2		$	31.6
Less:
Depreciation and amortization	38.7			37.1
Non-cash stock compensation expense	7.7			1.7
Non-Operating items:
Restructuring and related charges	5.5			1.1
Acquisition and integration costs	4.0			17.5
Overhead under-absorption	10.0			—
Elizabeth Arden 2016 Business Transformation Program	—			0.4
Elizabeth Arden inventory purchase accounting adjustment, cost of sales	—			16.0
Deferred compensation	—			0.9
Operating loss	(61.7		)	(43.1		)
Less:
Interest Expense	39.9			35.0
Amortization of debt issuance costs	2.3			2.2
Foreign currency gains, net	(10.6		)	(4.3		)
Miscellaneous, net	—			0.6
Loss from continuing operations before income taxes	$	(93.3	)	$	(76.6	)

As of March 31, 2018, the Company had operations established in 27 countries outside of the U.S. and its products are sold throughout the world. Generally, net sales by geographic area are presented by attributing revenues from external customers on the basis of where the products are sold.

The following tables present the Company's segment net sales by geography and total net sales by classes of similar products for the periods presented:




	Three Months Ended March 31, 2018
	Revlon		Elizabeth Arden		Portfolio		Fragrances		Total
Geographic Area:
Net Sales
North America	$	116.2	$	28.9	$	81.9	$	56.4	$	283.4
EMEA *	54.0		46.3		43.2		24.7		168.2
Asia	25.6		23.3		1.0		2.8		52.7
Latin America *	13.9		2.2		5.3		4.1		25.5
Pacific *	19.4		5.0		3.1		3.4		30.9
	$	229.1	$	105.7	$	134.5	$	91.4	$	560.7




	Three Months Ended March 31, 2017
	Revlon		Elizabeth Arden		Portfolio		Fragrances		Total
Geographic Area:
Net Sales
North America	$	134.2	$	33.5	$	86.7	$	67.2	$	321.6
EMEA	50.4		38.5		47.6		30.6		167.1
Asia	25.4		17.1		1.9		4.1		48.5
Latin America	15.4		2.2		7.6		3.7		28.9
Pacific	18.4		4.4		2.8		3.2		28.8
	$	243.8	$	95.7	$	146.6	$	108.8	$	594.9

* The EMEA region includes Europe, Middle East and Africa; the Latin America region includes Mexico; and the Pacific region includes Australia and New Zealand.



	Three months ended March 31,
	2018			2017
Classes of similar products:
Net sales:
Color cosmetics	$	199.1	36%	$	224.3	38%
Fragrance	124.3		22%	142.3		24%
Hair care	125.7		22%	127.2		21%
Beauty care	44.7		8%	48.0		8%
Skin care	66.9		12%	53.1		9%
	$	560.7		$	594.9

The following table presents the Company's long-lived assets by geographic area as of March 31, 2018 and December 31, 2017:



	March 31, 2018			December 31, 2017
Long-lived assets, net:
United States	$	1,470.9	83%	$	1,480.1	83%
International	300.1		17%	295.6		17%
	$	1,771.0		$	1,775.7